In the run-up to the new 2017-18 soccer season, we analyse the playing shirts of all 38 clubs in the top divisions of England and Germany to track the development of club sponsorship in each league.

3rd August 2017, 15:37

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With both the English Premier League and the German
Bundesliga introducing new shirt inventory this season, clubs have been offered
a new opportunity and a new challenge to sell branding on the sleeve of their
shirts. Sportcal Sponsorship examines the trends across both leagues, covering
kit suppliers, primary front-of-shirt sponsors and the new sleeve sponsors.

Premier League

Kit suppliers

It might come as a surprise to some that Puma is the top kit supplier in the Premier League, with deals in place for 25 per cent of the league’s teams. The most high-profile deal for the Germany-based brand is with Arsenal, a deal running until 2019 worth £30 million ($46.5 million) a year.

Nike (four deals), Adidas and Umbro (three each) are close behind, and it is the former two that have the most expensive deals in the league.

Adidas’ 10-year deal with Manchester United, valued at £75 million ($128 million) a year, was a world record when it was signed in 2015 and remains the largest in the Premier League. The contract stipulates that if the club fails to qualify for the Champions League for two consecutive seasons, then the value of the deal would be reduced by 30 per cent per season. United maintained the original fee by winning last season’s Europa League and subsequently qualifying for this season’s Champions League.

Chelsea’s new 15-year deal with Nike is the longest in the league and the closest challenger to the Adidas-United partnership in terms of value. The US brand signed up with Chelsea after the club’s deal with arch-rival Adidas was terminated six years early. The Nike deal with the English champions is worth £60 million ($73.45 million) a year and is now in place until the 2031-2032 season.

Alongside Chelsea, Nike has a new deal in place with Tottenham Hotspur and existing deals with Manchester City and newly promoted Brighton & Hove Albion. This means that Nike is the kit supplier for last season’s top three, all of which are guaranteed Champions League football this season. The total value of Nike’s four kit supplier deals this season accounts for 39 per cent of the league total.

The remaining kit supply deals in the Premier League are made up by Macron, Joma, New Balance and Under Armour. Macron have two small deals with Crystal Palace and Stoke City, and Joma has a single deal with Swansea. Under Armour lost a prized asset in Tottenham Hotspur to Nike this year but secured a new deal with Southampton. Finally, New Balance has a three-year deal in place with Liverpool worth £25 million ($41 million) for the season.

Shirt sponsors

Gambling and gaming brands account for 45 per cent of the front-of-shirt deals in the league, but only 17 per cent of the total value. The four-year deal between West Ham United and Betway commands the highest fee from the industry at £10 million ($13.09 million) a year.

The integrity of deals with gambling brands remains under scrutiny following The Football Association’s decision to cease all sponsorships with betting companies. The FA came under pressure to distance itself from the industry over its deal with Ladbrokes, but this pressure is yet to exert itself on Premier League clubs. Fans are perhaps less inclined to voice their concerns if it means their club will miss out on a valuable source of income.

Of the nine gambling brands with front-of-shirt deals, four are based in Asia, four in Europe and one in Africa. However, M88 (AFC Bournemouth) and OPE Sports (Huddersfield), two of the ‘European’ brands are based in tax havens and are heavily marketed as Asian brands in that market.

Gambling brands from the Far East and those that are marketed as Asian brands are snapping up deals with Premier League teams that are expected to finish in the lower half of the league. Teams in a less than commanding position from a commercial point of view are looking to Asia for a quick buck, instead of attempting to build a long-term, sustainable partnerships with their shirt sponsors. Of the seven new front-of-shirt deals starting this season, five are based in, or marketed at, Asia and there are five from the gambling industry.

While the increase in TV revenue has surpassed shirt sponsorship as the major source of revenue for Premier League clubs, the front-of-shirt landscape within the Premier League remains the strongest in world soccer in terms of value with a total league figure of just over £285 million ($376.88 million) invested by brands for the 2017-18 season. That figure is bolstered by the ‘big six’ from last season. The deals in place for Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur are worth £220.7 million ($291.85 million) this season, generating 77 per cent of the league’s front-of-shirt revenue.

It is the automotive industry that invests the most in the league’s front-of-shirt deals with Chevrolet (Manchester United) and Yokohama Tyres (Chelsea) the two most expensive deals in the league. Chevrolet’s £50.7-million ($80-million) -a-year deal with Manchester United is now into a third year and will remain in place through to the 2020-21 season. The length and value of the contract did not sit well with everyone at Chevrolet and the chief marketing officer who signed off on the deal was dismissed within weeks of its announcement.

Sleeve sponsors

The 2017-18 season will be the first time Premier League clubs display two different sponsors on their kit after the Premier League agreed to allow branding on the right sleeve of the shirts.

Manchester City were the first to announce their shirt deal in March 2017, a three-year contract with existing partner Nexen Tires. Since then, there has been a slow up-take of sleeve sponsors announced in the Premier League - perhaps surprisingly, given the commercial strength of the league and the global exposure it receives through worldwide media rights contracts.

Sporting Group International, the sports marketing company, agreed a deal with many of the league’s clubs to sell the sleeve rights on their behalf. The agency was actively seeking brands from outside the gambling and gaming industry to sign up, which is little surprise given the saturation of brands from the industry for the front-of-shirt deals.

At the time of writing, with just over a week left until the season starts, only nine of the 20 clubs have announced sleeve deals. Of those nine clubs, there are five (Chelsea, Huddersfield Town, Manchester City, Southampton and Watford) which had an existing relationship with their new sleeve partner, either through their front-of-shirt deals or via a previous partnership. Of the remaining four, two have front-of-shirt deals with their owners’ brands (Leicester City and Stoke) and two have signed new front-of-shirt deals this season (Crystal Palace and Swansea City).

This indicates that it has been easier for clubs to sign sleeve partners if they seek to sign with an existing partner, if their club owner is closely associated with the front-of-shirt sponsor brand, or if they are negotiating a new front-of-shirt deal this season, after the change in regulations.

The introduction of new inventory at a time when many clubs are in the middle of a contract with an existing front-of-shirt sponsor means that some clubs would have encountered problems with exclusivity. This is likely to have been the case for Chelsea and Southampton, both of which extended their front-of-shirt deals with Yokohama and Virgin Media to include the sleeve rights.

Bundesliga

Kit suppliers

Much like the Premier League teams, sides in the Bundesliga have gone against convention when signing up their kit suppliers. Traditional German powerhouses Adidas and Puma have signed up just over a quarter of teams between them, with Adidas having three deals compared to Puma’s two. Perhaps surprisingly, it is US sports giant Nike that rules the Bundesliga roost in terms of sheer volume of deals, with six deals (33 per cent) in place. However, Nike will lose one deal next season after Werder Bremen signed a deal with former Nike brand Umbro, which is now owned by Iconix Brand Group.

Although Adidas has signed a lower volume of deals than Nike, it seems that Adidas has adjusted its strategy to target the largest and most high-profile teams in the country, with Bayern Munich, Hamburg and Schalke all wearing the brand’s trademark three stripes this season. Despite only making up 17 per cent of the total deals, the value of the three deals accounts for 59 per cent of the total league value.

While Hamburg are not hitting the same heights as in their 1970’s heyday, they are a Bundesliga ever-present and, with a stadium capacity of 57,000, are still among Germany’s most visible teams which is reflected in the value of their €4.5-million ($5.03-million)* -a-year kit deal. Schalke, a consistent presence in the Champions League over the past few seasons, also have a high-value deal worth €3.75 million ($5.51 million)* a year, but this pales into insignificance when compared to Bayern Munich’s €60-million ($67.09-million) -a-year deal with Adidas, which is also a shareholder in the Bavarian giants.
Less ‘traditional’ kit suppliers also have a presence in the Bundesliga. Jako, while less well known than its more established rivals, has spent 20 years building up a strong portfolio of clients across numerous sports, with deals in place in soccer with national associations (Iraq, Moldova, Macedonia and Syria) and with over 100 teams across Europe and Asia, from Champions League regular Bayer Leverkusen right down to non-league Bath City. Erima, Hummel and Kappa have one deal each with Bundesliga clubs, but have numerous other deals in place across a variety of sports.

Shirt sponsors

In complete contrast to the Premier League, 78 per cent of the front of shirt sponsors in the Bundesliga are German brands. Just 20 per cent of the Premier League’s front of shirt sponsors are UK brands. This domestic bias is reflected in most other leagues across Europe, underlining the Premier League’s success in marketing itself effectively to a worldwide market. However, it is worth noting that the majority of the value is driven by a handful of clubs in England, whereas the wealth is more evenly distributed in Germany.

It is also relevant to note that only one front of shirt sponsor in the Bundesliga is affiliated to the gambling industry, namely Hertha Berlin’s sponsor Bet-at-home.com, which means that the clubs are less vulnerable to ethical criticism.

In the Bundesliga, firms from the financial services sector are the most prevalent (22 per cent), while food and industrial goods and services (17 per cent) come next. However, deals like Schalke’s partnership with Gazprom for €24 million ($27.35 million) do show that there is an opportunity for German clubs to draw in significant foreign investment.

Perhaps the least surprising partnership is found in Leipzig, where Red Bull has bought the front of shirt space on its ‘works’ team RB Leipzig for a fee of €7 million (€9.44 million), neatly side-stepping Uefa’s rules around club branding to ensure that its logo is still front and centre every time RB Leipzig step onto the field.

Sleeve sponsors

Whereas it is usually the Premier League that leads on the marketing
front, when it comes to sleeve sponsors the Bundesliga is actually the pioneer,
having announced at the end of 2015 that Bundesliga clubs would have the right
to sell space on the shirt sleeves from the 2017-18 season.

Therefore, it is perhaps surprising to see that only eight
clubs have a confirmed sleeve partner at the time of writing, ahead of the new season.
Those eight clubs (1899 Hoffenheim, Borussia Dortmund, Eintracht
Frankfurt, Hertha Berlin, RB Leipzig, Schalke 04 and VfB Stuttgart) have
entered into partnerships with automotive, financial services, food, property
and retail firms, but it is perhaps instructive to see that the majority of
clubs have yet to sign up sleeve partners, with Hamburg in particular eschewing
the possibility in favour of providing shirt exclusivity to their main partner
Emirates.

Taking into consideration the fact that
many front of shirt partners will have signed deals before the Bundesliga
changed the rules, the situation will no doubt change and evolve as existing
deals expire and are renegotiated.

Premier League versus Bundesliga: comparing average values

Given the fact that the Bundesliga has two fewer teams than the Premier League, using the average values in each league acts as a more accurate comparison tool. The top English soccer league is dominant when comparing kit suppliers, with a gap of $9.88 million between the leagues. This is in no small part attributable to the ‘big six’ in the league which command some of the highest fees in world soccer. However, when comparing the average front-of-shirt deal the leagues are closer in terms of values with a gap of $6.71 million. In this instance, the Bundesliga is boosted by a strong ‘middle order’ of clubs and a more even distribution of wealth among teams.

US dollar
conversion rates for individual deals derive from the date the deal was
announced.

US dollar
conversion rates for sum figures of more than one deal and averages as at 3
August 2017